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Innotrac Corporation Announces 2011 Second Quarter Results
Aug 11, 2011 (05:08 PM EDT)


ATLANTA, Aug. 11, 2011 /PRNewswire/ -- Innotrac Corporation (NASDAQ-GM: INOC) announced financial results today for the second quarter and six months ended June 30, 2011.  The Company reported an 8.1% increase in service revenues to $16.6 million for the quarter versus $15.3 million reported in the comparable period in 2010.  For the six months ended June 30, 2011, the Company reported an 8.0% increase in service revenues to $33.9 million from $31.4 million reported in the comparable period in 2010.  The increase in service revenue for both the quarter and six months ended June 30, 2011 was primarily due to the launch of new clients that were added during the fourth quarter of 2010.  

Revenues recorded from freight billings, which are typically billed as a pass-through expense and do not materially impact the Company's operating income, declined to $2.0 million in the second quarter of 2011 compared to $3.1 million in the same quarter of 2010 due to certain clients transitioning their freight usage from the Company's account to client owned accounts.  As a result of the reduction in freight revenues during the second quarter, total revenues for the three and six months ended June 30, 2011 were only 0.9% and 4.7% greater, respectively, than the same periods in 2010.

The Company reported a net loss of $816,000, or ($0.06) per share, fully diluted, for the three months ended June 30, 2011, versus a net loss of $1.1 million, or ($0.09) per share in the comparable period of 2010.  For the six months ended June 30, 2011, the Company reported a net loss of $1.3 million, or ($0.10) per share, fully diluted, versus a net loss of $2.1 million, or ($0.16) per share in the comparable period of 2010.  

"Consistent growth of approximately 8% in both the first and second quarters of 2011 compared to the same period in 2010 produced an improvement of $742,000 or a 36% reduction in our net loss to $1.3 million in the first six months of 2011 from $2.1 million in the same period in 2010.  With several new clients scheduled to launch in the second half of the year, along with significant organic growth expected from one of our major clients, we anticipate growth in revenue for the remainder of the year.  While we continue to invest in our business development efforts, we are controlling our total SG&A spending such that our SG&A costs as a percentage of total revenue has fallen to 45.5% for the six month period ended June 30, 2011 compared to 46.4% for the same period last year.  With continued growth in revenue, we anticipate continued improvement in our operating results throughout the rest of 2011 compared to the same period last year." said George Hare, CFO.

Innotrac

Innotrac Corporation, founded in 1984 and based near Atlanta, Georgia, is a full-service fulfillment and logistics provider serving enterprise clients and world-class brands.  The Company employs sophisticated order processing and warehouse management technology and operates seven fulfillment centers and one call center spanning all time zones across the continental United States.  Innotrac Europe GmbH has a network of fulfillment centers, call centers, and returns processing facilities with operations in the UK, Germany, France, Denmark, Sweden, Poland, Austria, Italy, Switzerland and the Netherlands.  For more information about Innotrac, visit the Innotrac Website, www.innotrac.com.

Information contained in this press release, other than historical information, may be considered forward-looking in nature.  Forward-looking statements in this release include statements relating to expected new clients, future operating results and performance future financial condition, future events and developments, as well as management's expectations, beliefs, plans estimates and projections relating to the future.  Forward-looking statements are subject to various risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected.  Among the key factors that may have a direct bearing on Innotrac's operating results, performance or financial condition are competition, the demand for Innotrac's services, Innotrac's ability to retain its current clients, Innotrac's success in growing its existing client base, developing new business, Innotrac's ability to maintain or improve gross margins in the face of increasing revenues, reducing operating costs in response to reduced service revenues, realization of expected revenues from new clients, the general state of the  industries that the Company serves, changing technologies, Innotrac's ability to maintain profit margins in the face of pricing pressures and numerous other factors discussed in Innotrac's 2010 Annual Report on Form 10-K and other filings on file with the Securities and Exchange Commission.  Innotrac disclaims any intention or obligation to update or revise any forward-looking statement whether as a result of new information, future events or otherwise.

Contact


George Hare

Chief Financial Officer

678-584-4020

ghare@innotrac.com



INNOTRAC CORPORATION

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)







Three Months Ended


Six Months Ended


June 30,


June 30,


(Unaudited)


(Unaudited)


2011


2010


2011


2010

Service revenue

$         16,589


$   15,339


$ 33,876


$ 31,367

Freight revenue

2,025


3,116


5,707


6,441

    Total revenue

18,614


18,455


39,583


37,808









Cost of service revenues

7,684


6,827


15,436


14,173

Freight expense

2,064


3,069


5,702


6,360

Selling, general and








   administrative expenses

8,794


8,745


18,002


17,547

Depreciation and amortization

840


884


1,691


1,732

   Total operating expenses

19,382


19,525


40,831


39,812

Operating loss

(768)


(1,070)


(1,248)


(2,004)

   Interest expense

48


41


94


80

       Total other expense

48


41


94


80

Loss before income taxes and

  noncontrolling interest in net loss

(816)


(1,111)


(1,342)


(2,084)

  Income tax

-


-


-


-

  Noncontrolling interest in net loss

-


-


-


-

Net loss  

$            (816)


$   (1,111)


$  (1,342)


$(2,084)









Loss  per share:








   Basic

$          (0.06)


$   (0.09)


$   (0.10)


$    (0.16)

   Diluted

$          (0.06)


$   (0.09)


$   (0.10)


$    (0.16)









Weighted average shares








   outstanding:








   Basic

12,815


12,861


12,838


12,734

   Diluted

12,815


12,861


12,838


12,734





INNOTRAC CORPORATION


Condensed Consolidated Balance Sheets


(in thousands)










June 30, 2011


December 31, 2010


ASSETS

(Unaudited)



Current Assets:





Cash

$            3,567


$               238


Accounts receivable (net of allowance for

   doubtful accounts of $94 at June 30,

   2011 and $242 at December 31, 2010)

10,724


15,279


Inventory

788


3,626


Prepaid expenses and other

1,338


1,149


      Total current assets

16,417


20,292






Property and equipment, net

10,738


11,380

Other assets, net

1,125


1,122


       Total assets

$          28,280


$          32,794







LIABILITIES AND SHAREHOLDERS' EQUITY




Current Liabilities:





Accounts payable

$            2,931


$            5,920


Line of credit

-


-


Accrued expenses and other

3,931


4,076


      Total current liabilities

6,862


9,996






Noncurrent Liabilities:





Other non-current liabilities

1,467


1,499


      Total noncurrent liabilities

1,467


1,499







      Total shareholders' equity

19,951


21,299


      Total liabilities and shareholders' equity

$          28,280


$         32,794









INNOTRAC CORPORATION



Condensed Consolidated Statements of Cash Flows



(in thousands)














Six Months Ended

June 30,






(Unaudited)






2011


2010



CASH FLOWS FROM OPERATING ACTIVITIES:






Net loss

$      (1,342)


$     (2,084)



Adjustments to net loss:







Depreciation and amortization

1,691


1,732




Provision for bad debts

35


(24)




(Gain) loss on disposal of fixed assets

(16)


9




Stock compensation expense-stock options

2


(3)




Stock compensation (income) expense-restricted stock

(25)


48




Decrease in other long-term assets

38


27




Increase in other long-term liabilities

19


114




Changes in working capital:








Accounts receivable, gross

4,520


2,233





Inventory

2,838


(742)





Prepaid assets and other

(155)


477





Accounts payable, accrued expenses and other

(3,379)


(2,129)




Net cash provided by (used in) operating activities

4,226


(342)











CASH FLOWS FROM INVESTING ACTIVITIES:






Capital expenditures

(748)


(506)



Proceeds from disposition of assets

17


-



Net change in noncurrent assets and liabilities

(7)


(8)




Cash used in investing activities

(738)


(514)











CASH FLOWS FROM FINANCING ACTIVITIES:






Net borrowings under line of credit

-


895



Capital lease payments

(142)


(119)



Contribution from noncontrolling interest

17


-



Loan fees paid

(34)


(62)




Cash (used in) provided by financing activities

(159)


714











Net increase (decrease)  in cash

3,329


(142)



Cash, beginning of period

238


1,118



Cash, end of period

$        3,567


$          976













SOURCE Innotrac Corporation